Coinbase Report: Q4 2024 Conditions Favor Bitcoin Growth Amid U.S. Rate Cuts, China Stimulus

Coinbase Institutional’s latest report signals a positive outlook for Bitcoin in the fourth quarter of 2024, buoyed by favorable economic conditions.

Anticipated U.S. interest rate cuts and China’s substantial monetary stimulus are expected to drive increased market liquidity and improve Bitcoin’s performance, setting the stage for a strong quarter for the leading cryptocurrency.

Bitcoin continues pushing towards channel high and it’s currently above our target level $64,000 – $65,000 level (yellow box)

Weekly and monthly close are coming and closing above this level would put out target to test of all time highs with very likely break out.

$TOTAL3 -… pic.twitter.com/L4wTTQw8KZ

— Crypto Cobrex (@CryptoCobrex) September 27, 2024

Q4 2024 Outlook: Favorable Conditions for Bitcoin Growth

According to Coinbase Institutional’s “Takeaways from Token2049” report, co-authored by David Duong, Head of Institutional Research, and David Han, Institutional Research Analyst, the upcoming months could be promising for Bitcoin and other high-beta crypto assets.

$BTC Historical Data Analysis

" Why Q4 2024 is Highly Bullish ✅️🆙️ "

" September Green Month, Correlation with Q4 "

2015
~September = 2.35% 🆙️
~Q4 = Highly Bullish
October = 33.5% 🆙️
November = 19.8% 🆙️
December = 13.83% 🆙️

2016
~September = 6% 🆙️
~Q4 = Highly… pic.twitter.com/gHKgCE6asl

— Aditya Siddhartha Roy❁ (@Adityaroypspk) September 27, 2024

The report highlights two key economic factors that are expected to boost Bitcoin’s value:

• U.S. Interest Rate Cuts: The Federal Reserve’s potential easing of interest rates is anticipated to increase investment in riskier assets like cryptocurrencies. Lower rates typically reduce the appeal of traditional fixed-income assets, pushing investors towards higher-yielding options such as Bitcoin.
• China’s Fiscal and Monetary Stimulus: China’s significant economic support measures are expected to enhance global market liquidity, indirectly benefiting digital assets. By injecting capital into its economy, China could spur broader investment trends, creating a more favorable environment for cryptocurrency growth.

This combination of supportive U.S. and Chinese policies is likely to create tailwinds for Bitcoin, which is already positioned as a strong performer in the crypto market.

Coinbase analysts project that these economic conditions will help sustain Bitcoin’s upward momentum throughout the remainder of the year.

Ethereum Faces Headwinds Despite Spot ETF Launch

While Bitcoin’s outlook appears promising, Ethereum is struggling to gain similar traction. According to the report, Ethereum’s network has been burdened by rising transaction fees, driven by increasing on-chain activity and growing demand for decentralized exchange (DEX) services.

Despite the recent introduction of spot Ethereum ETFs in the U.S., the asset has not experienced the same level of excitement as Bitcoin. Analysts attribute this disparity to Ethereum’s ongoing challenges with network efficiency and scalability. The report noted:

$ETH Spot ETF experienced its largest outflow since July 29, with $79.3M on Monday.

Not good at all. Also, please do not connect the price of the asset with this in short term. pic.twitter.com/0k23K95wAW

— Kapoor Kshitiz (@kshitizkapoor_) September 24, 2024

“Although many market participants are bullish on BTC, there remain a few skeptics on ETH, as the token has not significantly benefited from the launch of spot ETH ETFs in the U.S. over two months ago.”

This lack of enthusiasm for Ethereum stands in contrast to the growing interest in emerging blockchain networks like Solana, which are expanding their ecosystems with new products and partnerships, offering faster and more cost-effective transaction solutions.

Broader Crypto Market: Opportunities and Challenges Ahead

Despite Ethereum’s hurdles, the broader crypto market remains optimistic. Layer-1 networks like Solana and other decentralized platforms are gaining momentum, challenging Ethereum’s dominance by addressing scalability and transaction efficiency issues. Furthermore, the rise of DEXs and advancements in blockchain infrastructure signal continued innovation and growth for the industry as a whole.

In summary, while Bitcoin is poised to benefit from macroeconomic trends, Ethereum’s path forward appears less certain. The ongoing competition among layer-1 networks and the evolving regulatory landscape will be crucial factors to watch as the crypto market navigates through Q4 2024.